JPMorgan has released a research note indicating that China's factory automation (FA) upward cycle remains intact, though the recovery is becoming increasingly selective, with growth and quality increasingly concentrated in high-value, innovation-driven automation and robotics segments.

According to the latest data from MIR, FA sales rose 8% year-on-year in the second quarter of 2026, while the industrial automation (IA) market remained broadly flat with a modest 0.2% increase, and process automation (PA) declined 4% year-on-year. At the product level, AC servo motors surged 25% year-on-year, small PLCs (programmable logic controllers) climbed 15%, medium and large PLCs advanced 14%, and industrial robots grew 17%.

The bank suggests that for the remainder of this year, investors should refocus on lagging names and supply chain beneficiaries, particularly Zhejiang Sanhua Intelligent Controls Co.,Ltd. (02050) and Jiangsu Hengli Hydraulic Co.,Ltd. (601100.SH), which are tied to Tesla's robotics ecosystem, as well as UBTECH ROBOTICS (09880) and Shenzhen Inovance Technology Co.,Ltd. (300124.SZ) within the FA space. The firm continues to favor high-quality leaders with clear innovation and execution advantages.